Kerosene is a volatile, dangerous chemical that provides poor light, yet it continues to be widely used as a source of illumination in countries that have incomplete or unreliable electricity grids. A group of researchers wanted to know why kerosene is so popular, even though it’s more expensive than some alternative, innovative forms of lighting that are available to the same populations. Serguei Netessine, a Wharton professor of operations, information and decisions, spoke to Knowledge@Wharton about what he and his colleagues — Bhavani Shanker Uppari and Ioana Popescu from INSEAD — learned from their research, and what solutions could provide a better path forward.

Serguei Netessine: Off-grid light is a standard way to solve the access to electricity problem in many countries where there is simply no electrical grid as we know it. Thomas Edison invented electrical lights and poles and transformers and all of those things that allow us to just plug in a lightbulb to the wall, and it works. But most countries in the world don’t have this luxury. Almost no country in Africa, for example, has a fully developed grid, so they have to create electricity in other ways. Typically, this would involve some kind of an electrical generator if a country is a little richer. The Philippines, Indonesia — these are countries with thousands of islands and are relatively wealthy, so they can afford this kind of a solution. If you take poorer countries, countries with lower GDP — countries in Africa, some countries in Asia — they cannot even afford that. What they use is a very basic solution, which is a kerosene-burning lamp.

Knowledge@Wharton: I’m assuming that’s toxic.

Netessine: There are many problems with kerosene, and toxicity is just one problem. Millions of children every year get severely burned by kerosene because they just tip over the lamp and it keeps burning. Then there are issues with the quality of light. It’s a yellowish kind of light, so if you’re trying to do homework, that’s not good for your eyes. But what I would say is the biggest problem is that kerosene is three to four times more expensive than electrical light, sometimes even more than that. This is really puzzling — that people continue using kerosene given that it’s so expensive, because we are talking about countries where people live on $2 to $3 a day. Such a significant cost difference should lead them to adopt cheaper ways to use electricity. What really led us to this research is the realization that people still use kerosene despite all of the bad things that come out of it. I don’t even go into harm to the environment. If you are living on $2 to $3 a day, maybe it’s not the biggest concern that you have. But that is a consideration as well.

“What really led us to this research is the realization that people still use kerosene despite all of the bad things that come out of it.”

Knowledge@Wharton: What alternatives to kerosene did you examine in this paper?

Netessine: There are quite a few alternatives. The one that naturally comes to mind is solar light. Let’s take countries at the equator. They get plenty of sunlight, so solar is a natural solution. The problem is that even with the cheapest solar batteries that exist now, we’re talking about $70 to $100 per battery to feed a household with electricity. That’s just unaffordable. This is two, three months’ worth of income. Remember that in these countries, people don’t save. They are unbankable, essentially, and they live on their income that they get day to day, usually from subsistence farming. Whatever they catch, they eat. And whatever is left over, they sell.

This is why a particular solution got our attention, and the solution was proposed by a startup company called Nuru Energy. Nuru Energy created a very interesting ecosystem where they would give people heavily subsidized lightbulbs with a little rechargeable battery, and then they would find what they call a village-level entrepreneur, a person who would be a little bit more wealthy and who would be willing to invest into a rechargeable bicycle. That’s a stationary bicycle that you peddle for about 20 minutes, and you can recharge five light bulbs stacked on each other. This is sustainable. This is quick. Remember, solar still requires several hours to recharge. This person typically would run a little shop in the center of the village and would own this bike. People would come to him or her and pay a small fee, typically 10 cents or so for a recharge. Five cents would go to the entrepreneur, and 5 cents would go to Nuru Energy.

Knowledge@Wharton High School

Knowledge@Wharton: That sounds like a great solution. What is preventing people from adopting this technology?

Netessine: If you look at this business model, they heavily subsidized bulbs. The only way to really make money for Nuru in the long run is if people come and recharge relatively often. What we found — which was again a continuation of this puzzle that people continue using kerosene – is that people would get the bulb and they might even come once or twice, but very quickly some of them would just disappear and never come back. Or they would come so rarely that the business model would not pay for itself.

This was a bit puzzling, because the price difference is pretty monumental. We are talking three, four, five, eight times in certain cases, because kerosene is usually only sold on the gray market. The prices have nothing to do with world oil prices, and they fluctuate a lot day to day. On the other hand, here you have a sustainable, clean, high-quality light solution, which does not have fluctuating prices, which does not have any of those minuses of the kerosene, but people were still not recharging as much as the company wanted them to.

“People would go and buy a little bit of kerosene, which would bring them even further away from recharging the light bulb, and this is kind of a vicious cycle.”

We looked into this issue and discovered what might seem like an obvious conclusion, but it was not obvious to us in the beginning. Imagine you have a very uncertain income. You don’t know if you’re going to have an extra 10 cents or 20 cents today or tomorrow. Of course, light is not your priority. You first spend on food and maybe on health. Whatever is left, you spend on light. The problem with electrical recharges is, unless you have a certain amount [of money left over] — the cost of a recharge — you just don’t have enough. Even when people get a bulb and decide, “I’m going to accumulate a bit of money to go recharge next week” — next week comes, and they don’t have this money. The kids need to do homework. You need to do some work in the backyard after sunset. What do you do? You say, “Well, maybe I’ll go and buy kerosene just this one time.” You can buy a little bit of kerosene [with the money you have]. You can buy a gallon, an ounce, any fraction. It’s just a matter of price.

People would go and buy a little bit of kerosene, which would bring them even further away from recharging the light bulb, and this is kind of a vicious cycle. That’s what really has been happening. The rechargeable bulbs were just not flexible enough. You could not pay for them in tiny little increments. Even paying 10 cents was a lot for them.

Knowledge@Wharton: What are some ways of overcoming these obstacles?

Netessine: There are some technological ways. For example, the way the bulbs originally were designed, you can either charge the whole bulb for 10 cents, or not at all. Technologically, it’s not very hard to add a little [charging] indicator, so consumers could say, “I don’t have enough money for the whole bulb. Let’s get a half-bulb, a quarter of a bulb, or one-eighth.” That’s a relatively cheap solution. The bulb would cost a little bit more because of the indicator, but it’s not a deal breaker.

There are other solutions, too. It has been shown that you can help people in those countries save money if, for example, you can get them to prepay. Whenever they have a cent left, they send this cent to the company and it accumulates. Otherwise, people in this kind of economy don’t really have the culture or the mechanisms to save. But they do have pretty ingenious payment mechanisms. For example, the company M-Pesa handles a significant percentage of GDP of many African countries, and all you do is you transfer money using SMS. They can transfer one cent at a time, and over time it will accumulate. It becomes like a savings mechanism.

Knowledge@Wharton: Based on your research, are you hopeful that this business model could work down the line?

“People in this kind of economy don’t really have the culture or the mechanisms to save. But they do have pretty ingenious payment mechanisms.”

Netessine: Most definitely. Our paper was a bit more on the theoretical side. In practice, you run into many other behavioral and adoption issues. As a follow up, what we are doing now is running, in cooperation with The University of Cape Town and a couple of other institutions, a huge, randomized control trial where we play with various terms of engagement.

For example, should you give this village-level entrepreneur 50% of the fee or maybe 60% or 40%? Maybe he’ll work harder if he had a bigger stake in the game and say, “I’ll just go around and collect the bulbs and bring them to the charging bicycle and pedal.” We’re experimenting with that. We’re experimenting with habit formation. Maybe if you give people the first three or four charges for free or at a very highly discounted price, they’ll get into this mold. We are also looking at the cost of other issues such as gender issues. Usually, people who suffer most from lack of light are women who work at home versus their husbands who might be working somewhere in the field. We are looking at educational issues because children are affected a lot. They come from school and need to do homework, and they don’t have the light.

Knowledge@Wharton: It sounds like there’s a lot more to explore there.

Netessine: Most definitely. It’s a big experiment with about 240 villages in Rwanda involved, with the support of the government and a couple of international organizations. It’s very hard to predict whether a particular business model, especially such a novel one, would work in an economy like Rwanda. When you see [a model] in your first-world economy and try to come up with something that would work in Africa, you can come up with all kinds of crazy things. But the only way to know is to experiment and see if it works.

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Anumakonda Jagadeesh

Very Interesting Story.
Kerosene is a thin, clear liquid formed from hydrocarbons obtained from the fractional distillation of petroleum between 150 °C and 275 °C, resulting in a mixture with a density of 0.78–0.81 g/cm3 composed of carbon chains that typically contain between 6 and 16carbon atoms per molecule. It is miscible in petroleum solvents but immiscible in water.
The American Society for Testing and Materials standard specification D-3699-78 recognizes two grades of kerosene: grades 1-K (less than 0.04% sulfur by weight) and 2-K (0.3% sulfur by weight). 1-K grade kerosene burns cleaner with fewer deposits, fewer toxins, and less frequent maintenance than 2-K grade kerosene, and is the preferred grade of kerosene for indoor kerosene heaters and stoves.
Regardless of crude oil source or processing history, kerosene’s major components are branched and straight chain alkanes and naphthenes (cycloalkanes), which normally account for at least 70% by volume. Aromatic hydrocarbons in this boiling range, such asalkylbenzenes (single ring) and alkylnaphthalenes (double ring), do not normally exceed 25% by volume of kerosene streams. Olefins are usually not present at more than 5% by volume.
The flash point of kerosene is between 37 and 65 °C (100 and 150 °F), and its autoignition temperature is 220 °C (428 °F).[11] The pour point of kerosene depends on grade, with commercial aviation fuel standardized at −47 °C (−53 °F).
1-K grade kerosene freezes around -40 °C (-40 °F, 233 K).[
Heat of combustion of kerosene is similar to that of diesel fuel; its lower heating value is 43.1 MJ/kg (around 18,500 Btu/lb), and its higher heating value is 46.2 MJ/kg.
In the United Kingdom, two grades of heating oil are defined. BS 2869 Class C1 is the lightest grade used for lanterns, camping stoves, wick heaters, and mixed with gasoline in some vintage combustion engines as a substitute for tractor vaporising oil. BS 2869 Class C2 is a heavier distillate, which is used as domestic heating oil. Premium kerosene is usually sold in 5 or 20 liter containers from hardware, camping and garden stores and is often dyed purple. Standard kerosene is usually dispensed in bulk by a tanker and is undyed.
National and international standards define the properties of several grades of kerosene used for jet fuel. Flash point and freezing point properties are of particular interest for operation and safety; the standards also define additives for control of static electricity and other purposes.

“Kerosene, also known as paraffin, is a transparent liquid fossil fuel which is generated from the refinement of crude oil. Kerosene is highly flammable and has been used all over the world for lighting, however with the widespread electrification in developed countries, the use of kerosene vanished. Kerosene is still widely used for lighting in developing countries, where it is also been used for cooking, and to a lesser extent for heating. It is estimated that more than 500 million households still rely on kerosene or other liquid fuels for lighting, which corresponds to an annual consumption of 7.6 billion litres.
The flash point of kerosene is between 37 and 65 °C, its auto-ignition temperature is 220 °C, and it has a high energy density of around 43 MJ/kg[2]. Chemically, kerosene is a mixture of hydrocarbons. The chemical composition depends on its source, but it usually consists of about 10 different hydrocarbons, each containing 10 to 16 carbon atoms per molecule[3]. The quality of kerosene can vary, and is determined by the impurity content, in particular for sulfur and aromatics, which reduce combustion efficiency and increase noxious emissions during combustion.
Kerosene cooking is widespread in many developing countries, especially in urban households, where biomass needs to be purchased, and electricity and LPG are expensive or unreliable[4]. Kerosene is usually transported in bulk, with rural areas purchasing kerosene by litre or bottle. Research shows that there are a limited number of comprehensive studies that examine the quantity of kerosene used for cooking and for lighting. N. L. Lam et al. have analyzed surveys, reports, and local correspondence from 23 countries and assume a monthly consumption between 1 and 10 L per household. Portable kerosene stoves are used for cooking with kerosene, especially the Primus stoves invented in 1892 or the wick-stove.
Cooking with kerosene has the following advantages:
 Fast cooking when used in appropriate (pressurised) stoves.
 Easy storage of fuel (however, there is a risk of erroneous consumption; see below).
 It can be bought in small quantities, and thus is affordable (=low investment barriers) for poorer families.
 It is an alternative stand-by technology for urban electricity users in case of power cuts.
 It is an alternative where access to free biomass for cooking is not available.
However, the use of kerosene for cooking comes along with serious disadvantages:
 Kerosene is an exhaustible resource.
 When used in cheap wick stoves, kerosene can produce high levels of pollutants, and can significantly contribute to indoor air pollution and ill-health.
 It has an unpleasant smell and frequently adds an unpleasant taste to the food being cooked.
 It is highly flammable: every year it causes a large number of fires and deaths. This is mainly caused on careless handling and lacking safety features of cheap devices. User mistakes include fuel spillages, refilling while the burner is running, tumbling the stove while it is burning). An inherent problem of wick type stoves is the heating up of the tank when used for a long time, which can lead to the explosion of the stove.
 It’s a non-renewable fuel.
 Kerosene is not particularly poisonous. However, if someone accidentally swallows kerosene there is the risk of short-term lung damage if vomiting occurs. On occasions, kerosene is responsible for a considerable number of deaths among children. Frequent skin exposure may lead to skin damage
For these reasons the use of kerosene as a household fuel should not be encouraged except in special cases (e.g. refugee camps with little access to biomass). If kerosene is the best fuel option, it should be promoted together with safe and efficient kerosene stoves. The World Health Organization discourages the use of kerosene in households because of the high risk of burns, poisoning, and deaths[5]. Cheap wick stoves and lamps can emit high levels of smoke emissions[6], which cause health problems. The emissions include hundreds of different compounds, which can be categorized into particulate matter, carbon monoxide, formaldehyde, polycyclic aromatic hydrocarbons, sulfur and nitrogen oxides[4]. Kerosene is sometimes mentioned as the clean alternative to biomass cooking fuels, however there are a lack of credible studies that thoroughly examine exposure concentrations, health effects of PM-composition, etc. to verify this assumption”(energypedia)..
“As the British firmly established their dominance in erstwhile Travancore by 1840s, they also began to introduce their products in erstwhile Travancore. Kerosene became popular in the west in the 1850s. Kerosene lamps seemed to have taken over coconut, punna and marotti oil lamps by the turn of the 20th century (except for religious purposes). Kerosene lamps were explicitly banned in many temples in Kerala.
Kerosene was at first imported to Travancore by Alappuzha-based M/s Arnold Cheney & Co of New York and later M/s Ripley & Mackay. Burma-Shell came into the scene in 1928, importing and marketing kerosene. By 1930s petrol was also supplied. Meanwhile, oil was discovered in Assam in 1886 (Jaypore) and in 1889 (Digboi). By 1955, the refinery in Bombay High was opened. Distribution of LPG began in many places in the country.
While kerosene is a term with Greek roots, Mannenna in Malayalam means the oil from the earth. The lantern became ‘Ranthal’ (some say its origin is a Portuguese word) in Malayalam and spread fast among Malayalis.
In addition to ‘Ranthals’, and chimminivilakku, bicycles also had headlights that used kerosene and there were fans that worked with kerosene. The cans used to supply kerosene ( mannenna patta) became a pop-percussion for kids and Malayali produced an eco-friendly seal for it, with Banana stem ( Kaalamundom).
The Ranthal is still around, but more as an ornamental light. Kerosene continues to be distributed through ration shops in Kerala, though mannenna paatta has given way to plastic cans ( khannas). Meanwhile, in 2014, Delhi announced that it had become a kerosene-free city, as a measure to reduce pollution.
Kerosene led to street lighting in the city, most likely, beginning from inside the Fort, the area of the privileged of the time.
Administration reports of Travancore confirm that streets in the city were lighted in 1870s: “Rupees 2449 have been expended in extending the lighting of the main roads and interior of the Fort in Trivandrum.”
It is not clear if it was kerosene lamps or traditional oil lamps, but is likely to be the former.
The kerosene lamps were lit by lamp lighters who carried bamboo ladders. For the convenience of placing the ladders, a horizontal bar was provided on lamp posts. The old lamp posts have almost completely vanished. One is preserved in the compound of old Padmavilasom palace, residence of the Dewan (now office of the Directorate of Technical Education). Another lamp post is preserved in the compound of Nagercoil Ammaveedu on the Airport road, near Eenchakkal. It also has the distinction of having shed light for Swami Vivekananda.
Octogenarian LalithaThankachi (a former student of the Sree Swathi Thirunal Music Academy) says that she had heard from elders in her family that Vivekananda Swami had visited the house and held discussions with her grandfather at the foot of this lamp. Her grandfather Achuthan Thampi was the adopted son of Ayilam Thirunal. Seeing the Swami walking by on the road in front of his house, he invited him inside, but the Swami chose to sit outside, at the foot of the lamp and had a chat with Thampi and accepted tender coconut water too”(Shedding light on the advent of kerosene lamps, Achuthsankar S. Nair,THE HINDU,July8,2016).
.
Dr.A.Jagadeesh Nellore(AP),India

Darnley Howard

With enough modifications I can see how Nuru can address the lighting problem. That is just one of the consequences of lack of electricity. There are so many others–many health care devices become unavailable, you can’t charge mobile devices that enable African innovations in fintech. Refrigeration becomes a problem, internet connectivity becomes difficult. The point is African countries need at least community level solutions to make a real difference in peoples live–to enable real value and wealth creation rather than making the status quo more tolerable.